FWC finds Uber driver not employee

There can be no doubt that the emergence of the “gig economy” has changed the way we work and is challenging our understanding of the employment relationship.

Since its launch in 2009, Uber has been at the centre of many debates about the gig economy and the characterisation of workers as either employees or independent contractors. Internationally, the status of Uber drivers has played out in several courts and tribunals, with findings on both sides of the aisle according to local laws.

Here in Australia the Fair Work Commission (FWC) recently handed down a decision (Mr Michail Kaseris v Rasier Pacific V.O.F [2017] FWC 6610) in which it considered whether an Uber driver could be an employee for the purposes of the Fair Work Act 2009 (Cth) (FW Act).

Why is the distinction important?

The distinction between the two types of workers – independent contractors and employees – is critical to the determination of the legal rights and entitlements of the individual. For example, an employee is entitled to a minimum wage, annual and sick leave and is generally protected from certain actions of their employer, such as unfair dismissal. An independent contractor is not entitled to the same benefits or legal protections.

In the case before the FWC, the driver in question attempted to argue that he was an Uber employee so as to gain protection from unfair dismissal under the FW Act.

Uber’s position

Across the globe, Uber has consistently maintained that the individuals who drive cars and use its mobile app to find passengers are “driver partners” and not employees.

Uber allows drivers to decide when they want to drive and what trips they would like to accept or reject. This flexibility, Uber has argued, would not be available to drivers if they were employees.

In this most recent decision, Rasier Pacific V.O.F (the partnership responsible for Uber’s Australian presence) again maintained this position, stating that the driver who claimed he was unfairly dismissed was at all times an independent contractor and was not an employee who was protected from unfair dismissal.

Uber argued that when the driver’s service rating fell below Uber’s acceptable standard, he was “deactivated” on the Uber driver app, a contractual right that it reserved under its service agreement with the driver.

The driver’s position

In response to being deactivated, the driver lodged an unfair dismissal application with the FWC claiming that the level of control exerted over drivers by Uber meant that the relationship was, in reality, that of employer to employee, regardless of any contractual terms in the service agreement between the parties.

The driver claimed that the payment processing, trip fare setting and service standards imposed by Uber meant that the degree of control it exercised over him was more akin to the control exercised by an employer.

The FWC decision

Ultimately, the FWC agreed with Uber. It found that the relationship was not an employment relationship and that when looked at in its entirety, there was no work-wages bargain, significant degree of control or any other major factor that could establish an employment relationship.

At the conclusion of the decision, FWC Deputy President Gostencnik made some interesting observations about the status of the law and its relationship to the gig economy. He said that the current legal tests applied to determine if a worker is an independent contractor or an employee had,

…developed and evolved at a time before the new “gig” or “sharing” economy. It may be that these notions are outmoded in some senses and are no longer reflective of our current economic circumstances… Perhaps the law of employment will evolve to catch pace with the evolving nature of the digital economy. Perhaps the legislature will develop laws to refine traditional notions of employment or broaden protection to participants in the digital economy. But until then, the traditional available tests of employment will continue to be applied.

In summary, this decision from the FWC puts to bed (for the time being at least) the idea that Uber drivers are employees who are able to access the protections available to employees under the FW Act.

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